Buying your first home is both an exciting and overwhelming prospect. The whole property purchasing process is a complex, lengthy and time consuming one. If the whole thing is new to you and you haven’t got a clue where to begin, this is the guide for you. Here we have broken it down into actionable steps to help you along your way. So, without further ado, let’s get started.
Stage 1 – Save up for a Deposit
This is obviously the no.1 most important first step, saving for a mortgage deposit, and also not forgetting the other expenses that you will incur such as conveyancing surveys and stamp duty. The amount of money you will need to save will vary wildly according to what type of property you are after and what part of the country you live in (or want to move to), and what percentage of the purchase price of the property you want to put down. The more the better, which will reduce your monthly interest rate – however, the government at present is encouraging lenders to offer 95% mortgages on properties up to £600,000. So, if you wanted to purchase a home for £300,000 for example, you would only need to put down £15,000 and then borrow the remaining £285,000.
You will need to find out how much money you will be able to borrow – there are many online mortgage calculators to help you work this out. It will depend on your income – just your own, or joint with your partner – and your credit score.
Stamp duty, which is a tax paid to the government on purchasing a property, is calculated as a percentage of the final sale price.
Stage 2 – Become Familiar With the Area You Would Like to Live in
You probably already have an area in mind where you would like to put down your roots. It could be in another town or part of the country, or just down the road. Regardless, you need to know all there is to know about the area and then you will be able to make an informed decision about whether this is the right area for you and your family. For example, do you need to be in a certain school catchment area? This also pushes up the property prices in that area, as does being close to transport links such as train stations. What is the local crime rate? To find out, you can visit the police.uk website. It is most important that you know this. And lastly, be sure to actually visit the place and decide for yourself whether you like the “vibe” or not, and get an idea of the demographic. Find out what, if any, developmental plans there are (shopping centre, new block of flats), and whether you would be in approval of them or not.
Stage 3 – Apply for a Mortgage Agreement in Principle
This is not something you HAVE to do, however, it is advisable, as it provides sellers with the confidence to know that you will be able to purchase their property without any issues, as it demonstrates to them that the lender has agreed “in principle” to lend you the money.
Stage 4 – Register with Estate Agents in the Area you Want to Move to
This is a very good idea, as you will be on their books, and the estate agents will then contact you when a suitable property becomes available, and before it goes online. Definitely register with more than one estate agent – you will be under no obligation with any of them.
Stage 5 – View the Properties in Person
This is obviously extremely important; you don’t want to just rely on pictures you have seen. Only by visiting the place – and preferably more than once, at different times of the day, can you get an idea of what it’s really like and whether you can imagine your family living there or not. There may be things you are not happy with, and you may have the funds or desire to make improvements, or you may not.
Stage 6 – Seen Something you Like? Then Make an Offer!
Once you think you’ve found your dream home, or at least something suitable, now is the time to make an offer to the buyer. This is done via your estate agent either in person or over the phone, and it is also a good idea to put it in writing. It is usual to make an offer that is below the asking price, however, if there are other parties interested, your offer will need to be higher. It will work in your favour being a chain-free, first-time buyer, and if you say that your offer is subject to a survey and the property being taken off the market, then it will be less likely that you will be “gazumped” – that is, another buyer coming in with a higher offer and thus winning the bid.
Stage 7 – Apply for a Mortgage
As soon as your offer has been accepted, you can now apply for a mortgage. The usual mortgage term is 25 years, and you have a choice between fixed-rate or tracker.
Stage 8 – Find a Conveyancer
Conveyancing is the legal process that happens after an offer has been accepted, and it involves carrying out searches, drawing up and checking contracts, dealing with the Land Registry and paying stamp duty.
Stage 9 – Get a Property Survey Done
Not to be confused with the valuation survey, this is an important step in that it ensures that the property you want to move into is structurally sound and safe for your family to live in.
Stage 10 – Find a Removal Company
If you have more than just a few small items of furniture then you will definitely want to enlist the help of a professional removal company. It is worth spending the time and getting a few different quotes as you can save hundreds of pounds this way.
Stage 11 – Arrange Home Insurance
This needs to be in place from the day you exchange contracts, otherwise, if the place burns to the ground before you even move in, you will lose everything!
Stage 12 – Exchange Contracts
Here, both the seller’s and your legal representative’s exchange signed contracts, and you also pay the deposit. But before all this can happen, there are several things that need to be in place – a written mortgage offer, an agreed completion date, and buildings insurance from the day of exchange. Once the contracts have been exchanged, that’s it – all done and dusted, the property is yours! Your conveyancer will lodge an interest in the property, which will then allow you to pay the seller, and apply to the Land Registry to have the deeds transferred into your name.
Stage 13 – Moving in!
After the day of exchanging contracts, the final stage, “completion”, happens around two weeks later. However, this is not set in stone and is negotiable with the seller. What Completion means is that the money is transferred to the seller, and you can collect the keys from the estate agent, and finally move into your new home. Then you can spend a few hours trying to locate the kettle, have a lovely cup of tea, and then get to work unpacking all those boxes.
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